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CEPC seeks abolition of service tax

business Updated: Jun 26, 2009 15:37 IST

PTI
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The Cashew Export Promotion Council (CEPC) has proposed abolition of service tax and raising tax benefits under the Duty Entitlement Pass Book scheme to eight per cent in the forthcoming Budget.

"We have sent a wish list to the Finance Ministry proposing to do away with the service tax and hike the DEPB to eight per cent from the current 1.5 per cent," CEPC Secretary K Sasi Varma told PTI.

Under the DEPB scheme, companies can avail refund of customs duty paid on imported raw material for manufacturing products meant to be exported.

Varma said, in 2007, the tax imposed under DEPB was three per cent, which was brought down further to 1.5 per cent in October 2008.

The sector has also sought an additional four per cent DEPB for all value added cashew products, he said.

Moreover, he said, 25 per cent financial aid given under the Central schemes should also be increased to 40 per cent to encourage the development of local industries and processing factories.

Under the Focus Area Scheme exporters are given certain incentives. However, for cashew the countries under focus areas, like Africa and Latin America, are direct competitors and not potential markets, he said.

"So we have suggested for relaxing Focus Area Scheme and instead to make it product specific," Varma added.